KUALA LUMPUR (March 27): CIMB Equities Research is maintaining its Underperform call on Adventa and target price basis of 9.14 times CY13 price-to-earnings at RM1.48.
It said on Tuesday this was a 30% discount to Top Glove’s two-year average. Derating catalysts include falling demand for its natural rubber (NR) product and lower nitrile margins. CIMB Research said it prefered Hartalega.
Commenting on Adventa’s first quarter results for the period ended Jan 31, 2012, it said at 19% of its full-year estimate, 1Q core EPS was in line as it expected an improvement in sales in the quarters ahead when Adventa’s nitrile glove plant starts.
Also, raw material prices are expected to remain stable, enabling management to raise selling prices and pass costs on, it said.
It said on Tuesday this was a 30% discount to Top Glove’s two-year average. Derating catalysts include falling demand for its natural rubber (NR) product and lower nitrile margins. CIMB Research said it prefered Hartalega.
Commenting on Adventa’s first quarter results for the period ended Jan 31, 2012, it said at 19% of its full-year estimate, 1Q core EPS was in line as it expected an improvement in sales in the quarters ahead when Adventa’s nitrile glove plant starts.
Also, raw material prices are expected to remain stable, enabling management to raise selling prices and pass costs on, it said.
